Q4 2026 – UK Merger Control and National Security/Investment Screening Update

EU/UK Competition AlertNotwithstanding the change in Prime Minister in July 2026—with Andy Burnham becoming the seventh person to hold the office in a decade—there is, at least for now, little indication that the UK’s recalibrated approach to merger control and investment screening is set for a comparable shake-up in the short-term, at least. Indeed, the mood music is one of continuity, with Jonathan Reynolds—the Secretary of State for the Department of Business, Innovation, Science and Trade (BIST)—recently confirming that there were no plans to amend the ‘strategic steer’ given to the UK Competition and Markets Authority (CMA) under the Starmer Government.
Putting a PIIN in the Paramount/Warner Bros. Discovery Saga
As noted in our Q3 2026 Update, on 30 June 2026, the Secretary of State for Culture, Media and Sport—Lisa Nandy—announced that she was “minded to” issue a Public Interest Intervention Notice (PIIN) under section 42(2) of the Enterprise Act 2002 (EA02) in respect of Paramount’s proposed acquisition of Warner Bros. Discovery.1 However, by 6 August 2026, the CMA had unconditionally cleared the deal in Phase 1 and the Secretary of State had confirmed that she would not in fact be moving to issue a PIIN. But the path to avoiding a PIIN was not entirely smooth sailing, as the parties were required to provide legally binding commitments to address the Secretary of State’s concerns (see here). These included assurances regarding:

The preservation of distinct editorial identities of linear and on-demand services in the UK.
Continued commissioning, and acquiring, of original UK children’s content.
The maintenance of news editorial independence, including the independence of Channel 5 News from CNN International and CBS News, and access to news archives on standard commercial terms.
The continued operation of Channel 5 as a Public Service Broadcaster, with a UK-focused commissioning strategy and increased funding to support high-quality news, original children’s programming and drama.
The continued offering of a breadth of genres serving the diverse interests of UK audiences.

The Paramount/Warner Bros. Discovery saga demonstrates that, for certain high-profile deals and/or those involving sensitive targets, political considerations arguably matter just as much as competition considerations. Parties can no longer assess risk in the UK purely through a competition law lens, particularly where the deal touches on markets that may attract political attention. In such deals, it is important for merging parties to work closely with their advisors to give due consideration to designing and implementing a suitable government engagement strategy in parallel to developing their competition advocacy. This is particularly true given that Ms. Nandy would have been willing to introduce a new public interest consideration2 (to capture streaming and video-on-demand services) highlighting that the statutory powers under the EA02 are not static and could evolve to address new or emerging public interest concerns over time.3
4Ps in Action: Vandemoortele/Délifrance and Nexfibre/Substantial Group
Two recent deals—Vandemoortele/Délifrance (closed) and Nexfibre/Substantial Group (ongoing)—demonstrate how the CMA has continued to bed in its 4Ps framework (pace, predictability, process and proportionality) in the merger control context, as well as demonstrating that the CMA will continue to investigate combinations with genuine UK competition concerns with vigour.

Vandemoortele/Délifrance: This deal concerned the supply of frozen bakery products to both retail and foodservice customers. At Phase I, the CMA concluded that. absent remedies, the deal would have led to a substantial lessening of competition (SLC) in the supply of frozen laminated dough products to retail and foodservice customers in the UK. The parties proposed undertakings in lieu (UILs) of a Phase II reference which the CMA was, in principle, happy to accept.4 However, the UILs package ultimately lapsed because the parties were unable to satisfy the CMA’s upfront buyer requirement within the statutory timetable (a maximum of 90 working days from the date of the Phase I decision) and, as such, the deal was subsequently referred for a Phase II investigation in any event.

Once in Phase II, the parties quickly conceded that the deal would lead to an SLC, resulting in a truncated Phase II review timeline, with the CMA publishing its final report and conditional approval almost seven weeks ahead of the 24-week statutory deadline. The CMA’s approval was conditional on divestment of Vandemoortele’s plant in Worcester and Vandemoortele’s sale operations located at Staines-upon-Thames to a suitable purchaser.5

Nexfibre/Substantial Group: This ongoing deal concerns the supply of fixed broadband services at both the retail and wholesale level, and is one of the first high-profile examples of the new fast-track reference procedure introduced by the Digital Markets, Competition and Consumers Act 2024 (DMCCA).6 The mechanism allows parties to request a reference to an in-depth Phase II investigation, foregoing a full Phase I inquiry without conceding an SLC at that stage.7 The CMA accepted the reference request on 1 July 2026 and, by 7 July 2026, had published its Areas of Focus paper for the Phase II review.

These two cases demonstrate that where deals raise potentially meaningful UK competition concerns, merging parties have a variety of options available to expedite the approval process—consistent with the 4Ps’ emphasis on pace and process, including SLC concessions and DMCCA fast-track reference requests. While these mechanisms may not be the right option for every deal, they do provide a potentially faster route to clearance, even in deals which raise substantive UK competition concerns. For dealmakers, it emphasises the importance of conducting a comprehensive UK competition assessment at the outset of a deal and working closely with legal advisers to devise an appropriate regulatory strategy.
For more straightforward deals that do not raise potential competition concerns, briefing papers remain a viable and popular approach for bringing transactions to the CMA’s attention (providing a middle ground between adopting a “do nothing” approach and submitting a formal merger notification). The number of briefing papers submitted to the CMA’s Merger Intelligence team has risen from just 39 in 2017/18 to 217 in 2025/26 (up from 187 in 2024/25).8For those deals that do proceed to formal investigation, the CMA has brought the average length of pre-notification down to 57 working days in 2025/26 (down from 71 working days in 2024/25) and Phase I timelines—on average—are down to 29 working days (compared to 38 working days in 2023/24).9 The key takeaway for dealmakers being that the CMA continues to find ways to work more efficiently across all kinds of deals, particularly where the parties are willing to engage constructively with the CMA.
What Does the New UK Prime Minister Mean for the National Security and Investment Act?
Among the Prime Minister’s early machinery of government changes was the move of the Investment Security Unit (ISU)—the operational unit responsible for administering the National Security and Investment Act 2021 (NSIA) regime—from the Cabinet Office to the Department for BIST. The move results in Jonathan Reynolds—Secretary of State for BIST—becoming the decision-maker responsible for deciding whether a deal poses a risk to UK national security under the NSIA.
While the move is not expected to result in any meaningful change in outcomes for the vast majority of notifications, which are unconditionally cleared within the initial review period, it does put the ISU at the heart of the UK Government’s Industrial Strategy machinery. Having launched the Labour Government’s modern Industrial Strategy in June 2025,10 Mr. Reynolds is arguably well placed to assess national security concerns against the wider context of sovereign capabilities, resilience, trade and economic growth.
Just two Final Orders have been issued this past quarter (only one since Andy Burnham took office). As summarised below, the Final Orders demonstrate that the UK Government continues to adopt a broad concept of national security with an Industrial Strategy angle, further embedding principles of strategic capabilities and supply chain resilience.

Acquisition of Future Technology Devices International Limited by Willow Vision Limited: This deal stems from the Government’s 2024 decision to unwind the acquisition by Chinese investors (via FTDI Holding Limited) of Future Technology Devices International (FTDI), a semiconductor company specialising in USB interface integrated circuits and related hardware/software. Following an unsuccessful judicial review challenge by FTDI Holding Limited, alternative (non-Chinese) purchaser Willow Vision was approved to acquire the relevant stake in FTDI subject to certain commitments relating to payments, communications between the parties (including FTDI Holding Limited) and FTDI’s ongoing activities.
Acquisition of University of Birmingham Patent Applications and Associated Know-How by Lace Lithography AS: This deal involved intellectual property (IP) relating to atom-beam lithography for advanced semiconductor manufacturing. Although the acquirer was from a ‘friendly’ jurisdiction (Norway), the Government only approved the arrangement subject to certain notification requirements related to the exercising of rights under the licence agreement. The theory of harm articulated in the Final Order related to the security of IP related to advanced semiconductor manufacturing processes, demonstrating how the Government is looking at supply chains holistically and aiming to secure technology necessary to buildout strategic capabilities.

Fifth Annual Report on the National Security and Investment Act
On 14 July 2026, the UK Government published the fifth annual report documenting the application of the NSIA (the Annual Report) since it came into force in 2022 (see here). Among other things, the Annual Report confirms that the number of notifications continues to rise from 906 (2023/24) to 1,324 (2025/26). The increase in notifications has, at least in part, led to longer waiting times for the ISU to deem notifications complete and commence the formal review period: it now takes 11 working days for mandatory notifications to be deemed complete, compared to just four working days in 2022/23.11
Notwithstanding the rise in notifications, the UK Government has dealt with 95.6% of notifications reviewed within the initial 30 working day review period (with the average review period being 29 working days) during 2025/26. Only 54 notifications in the most recent reporting period progressed to an in-depth assessment following a call-in notice being issued, but the Secretary of State did call in six non-notified transactions. Of the nine Final Orders issued in 2025/26, three related to non-notified transactions. This underscores the importance of conducting a comprehensive notifiability assessment at an early stage for all investments (including an analysis of whether a voluntary notification is advisable).
The Annual Report also further supports that it may be somewhat of a misnomer to describe the NSIA as being a foreign investment screening regime; rather, it is very much an investment screening regime, with UK-associated acquirers comprising 72% of notifications, 52% of call-ins and five of the nine Final Orders in 2025/26. As such, perceived target risk continues to play an important role in the Government’s assessment of national security risk, with enhanced focus on what the target does and how it fits into the UK’s national security taxonomy and Industrial Policy landscape. China-associated acquirers closely followed the UK with regards to Final Orders, comprising three of the nine Final Orders and the only prohibition during the reporting period.

1 When issuing her ‘minded to’ letter, the Secretary of State indicated that she would have been willing to introduce a new public interest consideration to accommodate the development and emergence of streaming and video-on-demand services (and its impact on viewing behaviour) since the EA02 and other public interest considerations were introduced.
2 Or expand the existing Media Plurality public interest consideration.
3 As was the case during the Global Financial Crisis when the Secretary of State for Business, Enterprise & Regulatory Reform, Peter Mandelson, introduced a new financial stability public interest consideration at speed in order to approve and close Lloyds TSB/HBOS.
4 The parties’ Phase I UILs included divestment of Délifrance’s UK viennoiserie business together with 2 production facilities in France with the capacity to supply all the frozen viennoiserie products that Délifrance sold into the UK.
5 Notably, the final remedies package agreed with Vandemoortele departs significantly from the Phase 1 UILs, potentially reflecting the greater ease of identifying and securing approval for a suitable purchaser of the divestment assets in the final remedies package.
6 The exiting firm decision in ABF/Hovis (2026) also benefited from the fast-track procedure (see here).
7 The CMA can decline fast track reference requests, for example, where it deems the relevant case is unsuitable given significant uncertainty on key points or the fast-track could negatively impact the CMA’s ability to align its proceedings with other regulators (see section 7 of the CMA’s guidance on jurisdiction and procedure here).
8 We have also received a “no further questions” response (effectively CMA clearance) within just four business days from submission of the briefing paper in two cases over the past two months.
9 Pursuant to its 4Ps framework, the CMA has established a 40 working day KPI for pre-notification. In the vast majority of cases, this KPI has been met (with the average length of pre-notification for cases reviewed under the KPI being 39 working days). The average length of pre-notifications overall is likely skewed by a limited number of complex cases necessitating longer pre-notification periods.
10 Mr. Reynolds was also involved in the negotiation of legally binding economic and structural commitments (including the Golden Share and UK HQ/tax restrictions) in parallel with the NSIA process given by EP Group in the context of its acquisition of International Distribution Services (owners of the Royal Mail).
11 In our experience of urgent financial restructurings and other types of distressed investments, supported by the UK Government, the ISU has approved within four business days.